Amazon’s Second Headquarter Has US Cities Do Virtually Everything To Woo The Company

The race for the hunt of America’s next top Amazon headquarters had seen a list of 238 cities getting reduced to 20. But those who did this scale down, say that the process was “very tough” and everyone showed “tremendous enthusiasm and creativity”.

This race has witnessed city mayors throughout the U.S. trying to win over the $600bn technology company to coax it to build its second headquarter in their city. The enticing factors included gifts (including a giant cactus from Tucson, Arizona), subsidised construction costs, generous tax breaks and even name changes.

And for the mayors and cities, the benefit is jobs. It is estimated that the new headquarters would create 50,000 jobs and each with an average pay over $100,000.

Amazon’s one-click ordering Dash devices were replicated by Birmingham, Alabama, which set up giant buttons in the city.

A mini pitch for Kansas City was done by its mayor in the review of 1,000 Amazon products bought by him.

Other cities have placed more extreme offers such as a $7 billion potential tax credit issued by New Jersey in case Amazon relocated to Newark.

The $38 billion boost given by the company to Seattle’s economy between 2010 and 2016 was cited by Amazon itself in its pitch to cities. The company claims that the company has generated 93,000 jobs and set up 33 buildings and its presence enhanced demand for hotels and donations to charities.

“Amazon has been tremendously beneficial for this community and city,” said Valdez. “It has brought in a cosmopolitan international component, added to our financial health with more tax revenue, created more jobs and improve the built environment.”

“We’ve seen a quadrupling of housing prices, longer commutes and young professionals who are not able to raise a family to have to find jobs elsewhere,” said Jeff Hou, a Seattle-based professor of urban design and planning. “People with limited incomes lose out. Real estate developers and people who own properties are the primary beneficiaries.”

“Cities ought to be cautious not to give away the store as it could create a backlash effect that could be negative in the long run,” said Roger Valdez, from Seattle for Growth. “It perpetuates the notion that Amazon is a giant global monster like Jabba the Hutt making people from hard-hit communities dance at will.”

There are others who are critical about the idea of a public auction and sneer at the concept of a “short list” of 20 cities. Such cities also include nine out of 10 of the largest labour markets in the country.

“This is a giant PR stunt spanning a huge share of their customer base in a month that’s a slow retail month,” said Greg LeRoy, from Good Jobs First. Because of the fact that state and local taxes account for a very little part of the total costs of its business, therefore the incentives offered to Amazon are not likely to influence the decision of the company, LeRoy added.

The company is also attempting to please U.S. President Donald Trump who had earlier publicly criticized Amazon and its CEO, Jeff Bezos, for not paying up enough taxes.

“Amazon is doing great damage to tax-paying retailers. Towns, cities and states throughout the US are being hurt – many jobs being lost!” Trump had tweeted last August. This comment had seen a drop of 45 billion in market value of Amazon within minutes.

(Adapted from TheGuardian.com)

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Categories: Creativity, Strategy, Uncategorized

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